July 25, 2019 / 3:33 AM / 4 months ago

China's CCB to give $291 billion in financing support to Hunan province

FILE PHOTO: An employee walks past the logo of China Construction Bank at the bank’s Dongguan branch office in Guangdong province, China July 5, 2019. REUTERS/Shu Zhang/File Photo

BEIJING (Reuters) - China Construction Bank Ltd (CCB) (601939.SS) (0939.HK) will provide over 2 trillion yuan ($291 billion)in “comprehensive financing support” to central China’s Hunan province over the next five years, according to the local government.

The country’s second-largest lender by assets has signed a pact to deepen strategic cooperation with the Hunan government on Wednesday, the provincial government said in a statement on its website.

The financing support will help “promote the high-quality development of manufacturing industry, foster and strengthen key enterprises and ‘little giant’ enterprises, and prevent and resolve local government hidden desk risks”, it said.

The statement did not elaborate on what the scope of financing support. CCB did not immediately respond to a Reuters’ request for seeking clarifications.

The landlocked province has come under spotlight due to its shaky state of local government finances. Shaoyang, a city in Hunan, was singled out by the National Audit Office last year for having raised hidden debt worth 7.2 billion yuan.

Leiyang, another city in Hunan, in May last year did not have enough money to pay the salaries of its civil servants, according to local media reports.

Strict control over debt risks partly contributed to the declining infrastructure investment growth in the first six months this year, said the local statistics bureau.

Hunan’s economic growth slowed to 7.2% in the first half this year from a 7.8% expansion in 2018, official data showed.

Reporting by Stella Qiu, Cheng Leng and Kevin Yao; Editing by Kim Coghill

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